1. Cost-Benefit Analysis DOD Application and Realities COL Mary Lopez 13 August 2003

2. Cost-Benefit Analysis – WHY?? Alcoa model –No price tag DOD realities –Limited resources – Need for decision / prioritization tool –Problem from the field: Limited expertise in economic assessments, calculations, reporting

3. Cost-Benefit Analysis Components Inputs (costs) Outcomes (benefits) –Increased profit Productivity enhancement Decreased errors / reject rate –Cost avoidance Damages / losses Injuries

4. Baselines and Projections Productivity enhancement –Current level of production –Model new level of production Reliable and valid simulation or evidence Decreased errors / rejection rate –Current error rate / rejection rate –Model new error and rejection rates Reliable and valid simulation or evidence

5. Baselines and Projections Damages / losses –Current level of equipment / capitol investment damages and losses –Model new damages and losses Reliable and valid simulation or evidence

6. Issues Injury Baselines and Projections - Issues Populations: Military and civilian Range of effects: active work force  disabled, retired  beyond administrativeMultiple administrative sources of data Data gaps Two levels of analysis – program & individual solution Baseline – previous year vs last five

7. The Gordian Knot The Gordian Knot Military Battalion aid stationNo data Troop medical clinicSome data Medical clinicKGADS Limited dutyKGADS – yes / no QuartersKGADS – yes / no HospitalizationSIDR Convalescent leaveUnused SIDR data element Medical holdNo data Medical retirementDisability data - percentage Post retirementVA data – percentage / care

8. Military Data Gaps Profile – days, restrictions Quarters – days Convalescent leave Population denominators Outsourced care Shipboard care Deployment care “I can tell you what equipment and supplies we have deployed down to the last nail. Do you mean to tell me that we don’t know how many military have been injured over there?”

9. The Gordian Knot The Gordian Knot Civilian First aidOSHA recordable (local) Private physicianNo data No lost time caseFECA data Compensable injuryDFAS timecard (45 days)/FECA Compensable illnessDFAS timecard (LWOP)/FECA Long term rolls FECA –Disability

10. Civilian Data Gaps FECA –Incomplete coding (e.g., NOI, COI, EOI) –No lost time vs lost time DFAS –Location information Population denominators

11. Critical Information Diagnoses Payments and percentages Lost time, limited duty Location Occupation Rank / WG or GS level

12. Injury Costs Medical care –Actual payments –Estimated costs (tests, procedures,specialties, regions) Time (salary cost) –Medical care (+buddy time) –Lost days –Limited day (% productive) Compensation - actual payments Disability –% disabled (base salary) –Actual payments –Replacement (e.g., hiring, training)

13. Analysis Program Level –Overall impact measured –Entire population –Sensitivity analysis Individual Solution –Target population – local rate and number affected –Current exposure and injury risk –Future exposure and injury risk Quantification of exposure challenges Straight line relationship between exposure and risk? Does injury risk equate to actual injury? –Sensitivity analysis

14. Questions??